We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Wall Street closed sharply higher on Wednesday after the Fed delivered interest rate hike in line with the market’s expectation. Moreover, the Fed Chairman has indicated that going forward, the central bank may consider about reducing the magnitude of rate hike if data permit them to do so. All the three major stock indexes ended in positive territory.
How Did The Benchmarks Perform?
The Dow Jones Industrial Average (DJI) advanced 1.4% or 436.05 points to close at 32,197.59. Notably, 23 components of the 30-stock index ended in positive territory while 7 in red.
The tech-heavy Nasdaq Composite finished at 12,032.42, climbing 4.1% or 469.85 points due to strong performance of large-cap technology stocks. The tech-laden index recorded its best single-day performance since April 2020.
The S&P 500 gained 2.6% or 102.56 points to end at 4,023.61. The benchmark closed above a technical barrier of 4,000 for the first time since Jun 9. All 11 broad sectors of the index closed in positive zone.
The communication Services Select Sector SPDR (XLC), the Consumer Discretionary Select Sector SPDR (XLY), the Energy Select Sector SPDR (XLE) and the Technology Select Sector SPDR (XLK) rallied 4.2%, 3.8%, 2.3% and 4.3%, respectively.
The fear-gauge CBOE Volatility Index (VIX) was down 5.9% to 23.24. A total of 10.56 billion shares were traded Wednesday, lower than the last 20-session average of 10.88 billion. Advancers outnumbered decliners on the NYSE by a 5.27-to-1 ratio. On Nasdaq, a 3.15-to-1 ratio favored advancing issues.
Rate Hike In Line With Expectation
After the conclusion of the July FOMC meeting, Fed Chairman Jerome Powell in his statement said that the central bank has decided to raise the Fed Fund rate by another 75 basis points after June. As a result, the range of the benchmark interest rate has gone up to 2.25 -2.50%. The moves in June and July represent the most stringent consecutive action since early 1990s.
Most importantly, Fed Chairman has indicated that the central bank may reduce the magnitude of rate hike going forward if data becomes favorable. According to Powell, “As the stance of monetary policy tightens further, it likely will become appropriate to slow the pace of increases while we assess how our cumulative policy adjustments are affecting the economy and inflation.” The next FOMC meeting will be on September.
Moreover, the fed Chair said that he does not think the economy is in recession or will be in recession in near future. “Think about what a recession is. It’s a broad-based decline across many industries that’s sustained more than a couple of months. This doesn’t seem like that now. The real reason is the labor market has been such a strong signal of economic strength that it makes you question the GDP data,” Powell said.
Senate Passes Bipartisan Chipset Legislation
The Senate cleared the more than $52 billion bill to help chipset manufacturers and ease the shortage of components vital for a range of industries. The Biden administration has expressed concerns that the United States had a 37% share of the global semiconductor and microelectronic production in 1990, which has drastically dropped to just 12%.
As a result, U.S. businesses, especially the auto and high-tech industries are suffering from an acute shortage of chipsets owing to the breakdown of the global supply chain during the pandemic.
The Department of Commerce reported that durable goods orders surged 1.9% in June in contrast to the consensus estimate of a decline of 0.3%. May’s data was revised upward to 0.8% from 0.7% reported earlier.
The core new orders (excluding transportation and government spending on military equipment) rose 0.5%. This metric is viewed as a signal of whether future business prospects are good or bad. Business investment climbed 8.4% year over year.
Pending Home Sales declined 8.6% in June in contrast to the consensus estimate of a decline of 1%. May’s data was revised downward to 0.4% from 0.7% reported earlier.
C.H. Robinson Worldwide Inc.’s (CHRW - Free Report) second-quarter 2022 earnings of $2.67 per share surpassed the Zacks Consensus Estimate of $1.93. Moreover, the bottom line surged 85.4% year over year. (Read More)
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Stock Market News for Jul 28, 2022
Wall Street closed sharply higher on Wednesday after the Fed delivered interest rate hike in line with the market’s expectation. Moreover, the Fed Chairman has indicated that going forward, the central bank may consider about reducing the magnitude of rate hike if data permit them to do so. All the three major stock indexes ended in positive territory.
How Did The Benchmarks Perform?
The Dow Jones Industrial Average (DJI) advanced 1.4% or 436.05 points to close at 32,197.59. Notably, 23 components of the 30-stock index ended in positive territory while 7 in red.
The tech-heavy Nasdaq Composite finished at 12,032.42, climbing 4.1% or 469.85 points due to strong performance of large-cap technology stocks. The tech-laden index recorded its best single-day performance since April 2020.
The S&P 500 gained 2.6% or 102.56 points to end at 4,023.61. The benchmark closed above a technical barrier of 4,000 for the first time since Jun 9. All 11 broad sectors of the index closed in positive zone.
The communication Services Select Sector SPDR (XLC), the Consumer Discretionary Select Sector SPDR (XLY), the Energy Select Sector SPDR (XLE) and the Technology Select Sector SPDR (XLK) rallied 4.2%, 3.8%, 2.3% and 4.3%, respectively.
The fear-gauge CBOE Volatility Index (VIX) was down 5.9% to 23.24. A total of 10.56 billion shares were traded Wednesday, lower than the last 20-session average of 10.88 billion. Advancers outnumbered decliners on the NYSE by a 5.27-to-1 ratio. On Nasdaq, a 3.15-to-1 ratio favored advancing issues.
Rate Hike In Line With Expectation
After the conclusion of the July FOMC meeting, Fed Chairman Jerome Powell in his statement said that the central bank has decided to raise the Fed Fund rate by another 75 basis points after June. As a result, the range of the benchmark interest rate has gone up to 2.25 -2.50%. The moves in June and July represent the most stringent consecutive action since early 1990s.
Most importantly, Fed Chairman has indicated that the central bank may reduce the magnitude of rate hike going forward if data becomes favorable. According to Powell, “As the stance of monetary policy tightens further, it likely will become appropriate to slow the pace of increases while we assess how our cumulative policy adjustments are affecting the economy and inflation.” The next FOMC meeting will be on September.
Moreover, the fed Chair said that he does not think the economy is in recession or will be in recession in near future. “Think about what a recession is. It’s a broad-based decline across many industries that’s sustained more than a couple of months. This doesn’t seem like that now. The real reason is the labor market has been such a strong signal of economic strength that it makes you question the GDP data,” Powell said.
Senate Passes Bipartisan Chipset Legislation
The Senate cleared the more than $52 billion bill to help chipset manufacturers and ease the shortage of components vital for a range of industries. The Biden administration has expressed concerns that the United States had a 37% share of the global semiconductor and microelectronic production in 1990, which has drastically dropped to just 12%.
As a result, U.S. businesses, especially the auto and high-tech industries are suffering from an acute shortage of chipsets owing to the breakdown of the global supply chain during the pandemic.
Consequently, shares of chipset giants like QUALCOMM Inc. (QCOM - Free Report) , Advanced Micro Devices Inc. (AMD - Free Report) and Analog Devices Inc. (ADI - Free Report) gained 2.3%, 5.4% and 4.1%, respectively. All three stocks carry a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Economic Data
The Department of Commerce reported that durable goods orders surged 1.9% in June in contrast to the consensus estimate of a decline of 0.3%. May’s data was revised upward to 0.8% from 0.7% reported earlier.
The core new orders (excluding transportation and government spending on military equipment) rose 0.5%. This metric is viewed as a signal of whether future business prospects are good or bad. Business investment climbed 8.4% year over year.
Pending Home Sales declined 8.6% in June in contrast to the consensus estimate of a decline of 1%. May’s data was revised downward to 0.4% from 0.7% reported earlier.
Stocks That Have Made Headline
C.H. Robinson (CHRW - Free Report) Q2 Earnings Surpass Estimates, Rise Y/Y
C.H. Robinson Worldwide Inc.’s (CHRW - Free Report) second-quarter 2022 earnings of $2.67 per share surpassed the Zacks Consensus Estimate of $1.93. Moreover, the bottom line surged 85.4% year over year. (Read More)